Macquarie cuts Eris Life's target price amid earnings dilution from recent acquisitions

Over the past year, shares of the firm have risen over 40 percent.

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26 Aug, 2025 12:21

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International brokerage Macquarie slashed its target price on Eris Lifesciences as the pharma player's earnings show fell under expectations.

Macquarie noted that while the firm's revenue for the fourth quarter beat its estimate by ten percent, the EBITDA and PAT came in meaningfully below its projections.

Eris Lifesciences reported a net profit of Rs 79.6 crore for the March quarter of FY24, up 29.5 percent from the year-ago period. The pharma firm reported a profit of Rs 61 crore in the same quarter of the previous year.

Revenue came in at Rs 550.9 crore, up 36 percent from the year-ago quarter of Rs 402.7 crore, the firm said on May 21.

The brokerage decided to maintain its outperform call, but cut its target price to Rs 1,100 per share, from Rs 1,230 earlier. From the previous session's close, this implies an upside of around 20 percent.

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The firm's management will issue consolidated guidance for FY25 following the first quarter results for FY25. Macquarie expects domestic revenue to grow 12-14 percent with an EBITDA margin of around 36 percent.

The brokerage said it cut the target price to reflect earnings dilution from Eris Life's recent acquisitions.

During the March quarter, Eris Lifesciences completed the acquisition of 28.5 lakh equity shares or 51 percent of equity of Swiss Parenterals for a consideration of Rs 637.5 crore. After the completion of FY24, Eris further acquired 10.6 lakh shares or 19 percent stake in the firm for Rs 237.5 crore.

Eris Lifesciences also completed the acquisition of Biocon Biologics' Indian Branded Formulations business comprising of Insulin, Oncology and Critical Care products for a consideration of Rs 1,242 crore on a slump sale basis. The acquisition was completed on April 1, 2024.

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